Murtuza Kothari Vs ITO (ITAT Mumbai)
ITAT Mumbai held that the cost of acquisition in present case would be the FMV of the flats which the assessee has acquired in exchange of surrender of tenancy right to the developer. Accordingly, AO is directed to re-compute cost of acquisition.
Facts- The assessee had not filed its return of income for the AY 2015-16. Whereas, have entered into a transaction of sale of immovable property for an amount of Rs. 86,00,000/-. Such information was received by AO, therefore, the case of assessee has been selected for scrutiny u/s. 147 of the Act. After analysing the aforesaid information furnished before the AO, it is observed by the AO that the assessee has disclosed full value of consideration adopted u/s. 50C of the Act for the purpose of capital gain at Rs. 86,00,000/- and a deduction was claimed u/s. 48 of the Act for Rs. 83,62,976/- as cost of improvement with indexation, thus Long Term Capital Gain (LTCG) of Rs. 2,37,024/- has been disclosed.
Notably, the claim of assessee u/s. 48 for deduction on account of cost of acquisition with indexation was denied, treating the same as NIL. AO further rejected the claim of assessee for deduction u/s. 54/54F of the Act on account of failure of assessee to submit relevant documents like valid registered sale agreement / contract in support of his claim.
